Even if Government does not reach its deficit target of 5.6 per cent of GDP but keeps the deficit on a downward trajectory, Government’s economic planners might be satisfied.
This is the position of Central?Bank of Barbados Governor Dr DeLisle Worrell regarding concern that the administration was failing to meet targets it set for the country under its Medium Term Fiscal Strategy (MTFS) programme.
During his quarterly media briefing at the Tom Adams Financial Centre, Worrell said: “Government does not have to go all the way to achieve a 5.6 per cent of GDP target for MTFS. As long as it shows significant progress in the direction of the strategy, you can prolong the strategy a little bit. . . . Government might even decide that to get to 5.6 per cent of GDP is not an achievable target at this time.”
According the Central Bank head, the future remained unpredictable, particularly with uncertainty in the United States economy and in the eurozone.
“Whatever happens with the global deficit, if we target the markets where we think we have the best opportunities, we can find niches within those markets and perform well and therefore have the ability to sustain visits to Barbados.
At the same time, the country’s lead economic adviser said:?“Our exchange rate remains stable, protected by an adequate level of foreign exchange reserves.
“Remarkably, our employment rate at ten per cent is not much higher than the unemployment rate in the United States, which is at 9.2 per cent.”
He told members of the media:?“I find that the worst of the recession may be behind us. Nonetheless, serious challenges remain. The most important of them: the fact that our fiscal revenues have not lived up to expectations.”
According to Worrell, another challenge facing the country was the absence of the expected build-up of foreign exchange reserves in the first half of the year as a result of heavy discounting in the tourism sector.
“The third source of worry is the uncertainty in the international economy and the fact that projections for the performance of our major sources of foreign exchange have been reduced in recent times.
“Still, we have reasonable options in terms of policies to deal with these challenges, precisely because we have been able to maintain economic stability,” he added. (GE)
